From Paperwork to Construction Site? : A Financial Geography Study of the Limits of the EU Sustainable Finance Framework in Directing Private Capital Toward Climate Adaptation in Sweden

Sammanfattning

This thesis examines whether the EU sustainable finance framework effectively directs privatecapital toward climate adaptation in Sweden. Situated within financial geography, it uses theconcepts of financial ecosystems and ecologies, and decoupling theory, to assess how the EUTaxonomy, the Corporate Sustainability Reporting Directive (CSRD), and the SustainableFinance Disclosure Regulation (SFDR) interact in practice regarding climate adaptation. Thisis supported by sub-questions on disclosure, decoupling, and the financial ecosystem andecology. Using Sweden as a case study, the research employs a document analysis ofsustainability disclosures from the three largest Swedish construction firms and four leadinginstitutional investors, supplemented by a thematic analysis of three expert interviews. Thefindings show that the framework produces information but not direction. The ‘virtuous cycle’linking corporate disclosure to capital allocation functions for mitigation but not adaptation,which is consistently mentioned but not addressed quantitatively. This process reflects noncoupling rather than decoupling, as adaptation is often never adopted as a practice. Theframework reshapes the reporting layer of the financial ecosystem but not the allocativestructures beneath it. The thesis concludes that disclosure-based regulation operates at thewrong scale to finance adaptation, as adaptation requires local, intermediating mechanismsoutside the framework’s reach.